Cairn last month stated that the tax department has continued to enforce its retrospective tax claim against the company whilst the arbitration initiated under the UK-India Bilateral Investment Treaty has been ongoing

The Cabinet Committee on Economic Affairs also extended the special dispensation of marketing and pricing freedom to natural gas produced from areas in the North Eastern region, said Petroleum Minister Dharmendra Pradhan

The investment by Cairn is another sign that North Sea assets are becoming attractive again to oil producers, which sold assets in the past few years, often to private equity investors, and cut costs after oil prices collapsed.

The three-member international arbitration tribunal "has stated that it will make appropriate arrangements to progress with the drafting of the award as expeditiously as possible after the final hearing," the company said in its preliminary results announcement.

To recover this, the tax department "seized" USD 104.7 million of dividend income due to it from Vedanta Ltd, where it holds about 5 per cent stake, Cairn said, adding it has since written off the dividend income.